Supporting client outcomes during market volatility
BY  |  

The rapid change in investment markets and economic conditions since March 2020 has tested the ability of financial advice business models to manage and support client outcomes effectively and in a timely manner during times of extreme market volatility.

What has become clear is that the innovative technology available on platforms such as HUB24 enables advisers to tailor an outcome for the clients and unlock value through leveraging functionality available on the platform.  In doing so, advisers can adapt, pivot and swiftly change portfolios to add timely value to their clients and, in many cases, preserve value in their clients' portfolios.

Technology driving value

Technology sits at the heart of managed portfolios, providing the flexibility to create and build value beyond investment returns.  In volatile markets, the ability to rebalance clients portfolios in a timely and efficient manner is essential, and this has been critically important in enabling advisers whoa re using managed portfolios to deliver a client experience that s seamless and with minimum disruption.

Financial advisers tell us that having this capability makes them feel more in control; they are able to implement their advice across all client accounts I a seamless and effective manner, ensuring that no one is left behind and that all their clients can experience the best timely advice that the practice has to offer.

The most recent Investment Trends Managed Accounts Survey found that the time saved by an advice practice using managed portfolios is highly significant - on average 13 hours per week [Investment Trends managed Accounts Reports, 2020].

This equates to 1.5 to 2 days back in the hands of practitioners to do that they do best - advise.  Key areas where practices saved substantial time included researching investments, investment administration and preparing records of advice.

Enhanced benefits for their clients are a significant driver for advisers to begin using managed portfolios.  The report found that advisers greatly valued the visibility that managed portfolios gave underlying shares, as well as direct beneficial ownership.  This means that because clients own the underlying assets rather than units, it allows clients via their adviser to strategically manage their capital gains more effectively.

Advisers also reported operational efficiencies as another attractive feature of managed portfolios.  They included efficient implementation and reduced risk and compliance burdens.  Ease of articulating their value proposition to clients and support in meeting the best interest duty were also sighted.

While modern technology enabled advisers to provide a mass customized experience, tailoring individual client portfolios around client preferences is becoming paramount and further demonstrates how advisers can add value to clients via managed portfolios.

Link to something E5gQ03xU